Tech, non-tech sectors mixed on recommended carbon fees

Taipei, Oct. 7 (CNA) Taiwan's tech and non-tech sectors had mixed reactions to the basic carbon fee recommended by a Taiwan government review committee on Monday, with major electronics companies saying they were ready while petrochemical, steel and cement suppliers urging caution.

They were reacting to the committee's recommendation of a basic carbon fee rate of NT$300 (US$9.33) per metric ton of carbon emissions during its sixth meeting since March of this year.

In addition to the basic rate, preferential rates of NT$50/tCO2 and NT$100/tCO2 were also recommended for companies that meet defined emissions reduction targets, according to the committee.

Carbon fees will not be collected until 2026, while 2025 will be used as a dry run in which large emitters will only have to report emissions amounts for 2024 but will not have to pay carbon fees, according to the committee.

The recommended fee still has to be approved by the Ministry of the Environment.

In response to the recommendations, the Taiwan Electrical and Electronic Manufacturers' Association (TEEMA) said it has arranged courses for its members every month to help them improve their operations and ease the impact of the new costs.

It said many tech heavyweights in Taiwan have prepared themselves for the new rules, but smaller tech firms will need help from the government to mitigate the impact of the additional costs.

Taiwan Semiconductor Manufacturing Co., the world's largest contract chipmaker and a TEEMA member, said it was determined to abide by the new carbon fee levies and had faith that the new costs will not affect its operations financially.

United Microelectronics Corp. (UMC), another contract chipmaker in Taiwan, said it will continue its efforts to cut carbon emissions by participating in the government's schemes to reduce emissions voluntarily and push for emission reduction plans.

UMC said it will also apply for carbon offset projects and buy carbon credits on carbon exchange markets, while introducing negative emissions technologies and seeking cheaper renewable energy.

The Petrochemical Industry Association of Taiwan said, however, that Taiwan's petrochemical industry has been struggling amid overproduction by China, which has led Chinese producers to dump their products in regional markets.

At the same, China has suspended preferential tariffs on petrochemical goods that were part of the Economic Cooperation Framework Agreement signed in 2010 between Taipei and Beijing, making it harder for Taiwanese exporters to sell products to China.

With the industry facing those difficulties, the association urged the government to pay close attention to the added financial burden of the new fees, although it said its members would comply with the new carbon fee rules.

Echoing the petrochemical industry, China Steel Corp., the largest steel maker in Taiwan, said the carbon fees will no doubt create more challenges, and it estimated it will have to pay NT$200 million to NT$400 million a year under the new system.

Meanwhile, Chang An-ping (張安平), chairman of cement supplier TCC Group Holdings, said the best ever price for cement produced in the country was NT$3,000 per metric ton, but if suppliers have to pay NT$3,000 in carbon fees per metric ton in 2030, few companies will want to produce cement in Taiwan.

He warned that if Taiwan had to completely depend on imported cement, its heavy industry for infrastructure would face major problems.

The Ministry of Economic Affairs said the preferential rate of NT$100 was higher than that in Japan and South Korea, and that it will continue to seek approval from environmental authorities for a better preferential rate for Taiwan's industries.